Dilapidations claim – A case study

We acted on behalf of a foreign investor client who was the tenant of a large industrial manufacturing site in England. The landlord of our client indicated that it intended to bring a substantial claim for dilapidations following service of a break notice which brought the lease to an end. The landlord showed serious intention that they were prepared to litigate, serving a detailed Letter Before Claim and subsequently a revised terminal Schedule of Dilapidations, estimating its claim at about £5million.

In order to substantially reduce the claim, we focused heavily on carrying out detailed investigatory works at the site itself, along with various behind the scenes investigations. We also instructed a number of relevant experts to form part of our team to advise on resisting the claim. From our ongoing intelligence we discovered that the landlord’s intention was to completely redevelop the site with a full scale demolition and new substantial construction project. As we were expecting a high value claim to shortly be issued in the High Court, this detailed research was a priority and the subsequent discovery of the redevelopment plans allowed us to respond appropriately in strong terms. Armed with this information, we made a significantly reduced offer to settle the dilapidations claim out of court. The settlement was compromised with the landlord accepting only a small percentage of its original claim in full and final settlement of any claims that the landlord may have had. The icing on the cake for our client was that the balance of the rent deposit was also returned to them.

Overall, the careful tactics and strategy that went into defending this dilapidations claim is a clear example of the importance of always taking into consideration the wider landscape and other factors which may impact on dilapidations claims. Our client was particularly pleased to achieve such a satisfactory outcome as they did not have to pay out the landlord’s initial claim, thereby significantly reducing any impact on their cash flow, along with receiving a significant amount of their rent deposit back.

For further information on dilapidations and other property related disputes please contact our partner Shams Rahman by email at shams.rahman@edwincoe.com or by telephone on 020 7691 4045.

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